Saying it will save Nevada money in the short-run despite posing a long-term burden on the state's general fund budget, Gov. Brian Sandoval announced today he will expand Medicaid to provide health insurance for more low-income Nevadans under the Affordable Care Act.
After this summer's U.S. Supreme Court ruling upholding the new federal health care law, states had the ability to reject expanding Medicaid -- the federal health insurance program for the poor -- to those making 138 percent of poverty level, as well as single, childless adults.
But following pressure from health care professionals, advocates for the poor, and others, Sandoval said he has opted to accept the expansion despite his overall opposition to the Affordable Care Act.
His announcement was first reported by the Associated Press.
"Though I have never liked the Affordable Care Act because of the individual mandate it places on citizens, the increased burden on businesses and concerns about access to health care, the law has been upheld by the Supreme Court," Sandoval said in a written statement. "As such, I am forced to accept it as today's reality and I have decided to expand Nevada's Medicaid coverage."
The federal government will pay 100 percent of the medical costs for the expansion for the first three years -- resulting in $712 million in federal funding coming to Nevada. The state, however, must share in the cost to administer the program. And in four years, Nevada will begin footing the bill for a portion of the medical costs as well.
Read why Gov. Sandoval was named one of Governing's 2012 Public Officials of the Year.
"That's a massive leverage of federal dollars," Sandoval's budget director Jeff Mohlenkamp said. "Considering how much federal dollars we are leveraging, the cost (of expansion) is fairly small."
The decision to opt into the Medicaid expansion will actually cost the state's struggling general fund less than if Sandoval had rejected the expansion.
Because the Affordable Care Act mandates individuals to carry health insurance, officials expect nearly 70,000 low-income Nevadans who are already eligible for Medicaid to enroll in the program. That will cost the state $84 million.
By expanding Medicaid -- to cover another 78,000 Nevadans -- the state will be able to move some indigent mental health and substance abuse patients off state-funded programs and into the federally funded Medicaid, saving close to $17 million. That means the total expansion will cost the state $67 million.
"To be clear, we're not actually going to save any general fund money," said Mike Willden, Sandoval's director of Health and Human Services. "We're just spending less general fund dollars. We're avoiding future costs."
Those savings will disappear in four years when the federal government begins shifting some of the cost back to the states. In a written statement, however, Sandoval said he will "call upon the Legislature to pass Medicaid patient responsibility cost-sharing measures."
Sandoval did not provide details about how he would ask Medicaid recipients to share in the costs, but at least one Republican lawmaker has floated the idea of a small co-payment for doctor's visits.
It's unclear whether lawmakers will back the expansion. Republican leaders could not be reached for comment late Tuesday but have been generally supportive of Sandoval's budget approach.
Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, said she still needs to see the numbers for how much it will cost.
But, she added, "It's an economic driver. We need to expand Medicaid, no question."
(c)2012 Las Vegas Sun (Las Vegas, Nev.)